John Lewis ‘risks becoming another Debenhams if it scraps its cherished employee ownership model, campaigners warn
Campaigners fear John Lewis could become “just another Debenhams or Sports Direct” if it abandons its cherished employee ownership model.
The 158-year-old retailer is currently owned by its 74,000 employees – which means it’s run for their benefit.
But chairwoman Dame Sharon White is considering a plan to sell a minority stake in the group, which also owns Waitrose. It wants to raise up to £2 billion to invest in the ailing business to restore it to a sustainable footing.
It’s grappling with a slowdown on the high streets – where online shoppers are increasingly moving – and bleeding cash due to the pandemic and the escalating cost of living.
But the move — which will attract outside investors for the first time in more than 70 years — would be a dramatic shift for John Lewis. It would require changing the company’s constitution to mitigate its mutual status.
John Lewis risks becoming ‘just another Debenhams or Sports Direct’ if it scraps its cherished employee ownership model, campaigners fear (file photo)
John Lewis opened his first shop on London’s Oxford Street in 1864. He now has 34 department stores across the country and 332 Waitrose supermarkets.
The company’s partnership structure has seen it hailed as the ideal employer, with then Deputy Prime Minister Nick Clegg saying in 2012 that it should be a model for the whole economy.
And in January, White, who has been in charge since 2020, said the business was geared toward “making the world a happier place” rather than maximizing profits. She said values remain an integral part of the group.
The Sunday Times reports that John Lewis needs up to £2 billion to invest in technology and data analysis as well as in the Waitrose supply chain.
It cannot collect money from staff and is restricted in how much it can borrow as it currently has £1.7 billion in debt.
Peter Hunt of joint lobbying group Mutuo said changing its partnership model would “just turn it into another Debenhams, Sports Direct or something”. He added, “At the end of the day, ownership of their employees makes them different and that’s why people love them.”
Raising John Lewis up to £2bn would mean nearly half of the business could end up being owned by an outside investor, Hunt warned.
Labor MP Gareth Thomas, chair of Parliament’s Joint Party Group, said the plans were “extremely concerning”.
Peter Hunt of joint lobbying group Mutuo said changing its partnership model would “just turn it into another Debenhams, Sports Direct or something”. Pictured: File photo of Worthing Debenhams store
He said: “If John Lewis loses his mutual status it will be devastating to staff as well as families across the country who have cherished the business for decades.
“Employee ownership makes John Lewis special, and it would be sad if that changed.”
Thomas and Hunt said the change would not be necessary if it was possible for the company to raise money without employees losing control.
Thomas said: “Ministers can prevent this through new laws to allow companies like John Lewis to raise money without having to give up their mutual status.
“If the political will was there, this could be settled and the mutual position of John Lewis saved.”
John Lewis insisted that the plans were not about revoking their mutual status. But a spokesperson said: “We have always said we would seek partnerships to help fund our exciting transformation and growth plans.
“Our partners, who own the company, will be the first to hear about any developments.”
DISCLAIMER:- Denial of responsibility! olorinews.com is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email at email@example.com The content will be deleted within 24 hours.